Volkswagen AG, Fiat S.p.A. and Fiat's controlling shareholder all denied a German magazine report today that the companies have discussed a possible merger.

Volkswagen has approached rival Fiat about a possible merger, Germany's Manager Magazin reported on its website on Thursday, citing unnamed company sources.

VW Chairman Ferdinand Piech, who is a member of the family that controls the German carmaker, has held various talks with associates and members of the Agnelli family, which controls Fiat, Manager Magazin reported.

However, a VW spokesman said today the company currently had no takeovers on the agenda as it focuses on improving efficiency at the group.

Fiat has not held any discussions with Volkswagen about a potential merger, a Fiat spokesman said in a statement. And Exor, the holding company which controls Fiat with a 30 percent stake, has held no merger talks with VW, an Exor spokesman told Reuters.

According to the Manager report, the Agnelli family would focus on Fiat's Ferrari sports-car unit and withdraw almost completely from the auto business, while the Chrysler Group could help VW's struggles in the U.S.

The report sent Fiat shares up as much as 5.1 percent to 7.99 euros, the stock's biggest intraday gain since Jan. 2. VW shares fell as much as 2.4 percent to 184.65 euros.

The German carmaker is valued at 88 billion euros ($120 billion), while Fiat is worth 9.9 billion euros.

"We deem the news realistic," said Gabriele Gambarova, an analyst with Banca Akros in Milan.

"Volkswagen has an urge to become the No. 1 global automaker, and an acquisition of that size would bring them to their target immediately," said Juergen Pieper, an analyst with Bankhaus Metzler in Frankfurt. "But real interest in Fiat as a whole is rather unrealistic and would entail many problems," including Fiat's struggles in Europe and potential antitrust issues in South America.

Deal obstacles

There are a number of obstacles to any deal, including finances and divergent strategies pursued by both Fiat and Volkswagen, the magazine said.

Fiat is finalizing a merger with Chrysler Group, which includes a listing on the New York Stock Exchange.

A Fiat source told Automotive News Europe that the company is not aware of any meeting between its shareholders and management with VW Group representatives.

The Wall Street Journal, citing two people familiar with the situation, also reported there are no talks taking place.

One source told the Journal that the Agnelli family chose to incorporate Fiat Chrysler Automobiles -- the company to be formed by the formal merger of Fiat and Chrysler later this year -- in the Netherlands to exploit Dutch law that covers a company's non-voting shares.

Those rules will make it easier for the Agnelli family to continue to control FCA, the Journal said.

Piech and Fiat CEO Sergio Marchionne have sparred publicly in the past.

Marchionne invited Volkswagen to a dawn showdown at the Paris auto show in 2012 after being irritated by comments from VW's longtime chairman.

Piech has often expressed an interest in acquiring Fiat's Alfa Romeo brand, which Marchionne has vowed to keep.